Not so nooby Not so pro- My fight with psychology

hello, good to see you here !

Very nice chart, i observe your trading time is London session, i'll be reading all your posts.

What's your sentiment on eu/$ on this week ?

due to the divergences i see, and the lack of a catalyst last night, I will be bearish until I see a 2-300 point drop. so really the main trade im aiming for this week is catching the breakout formation for this move

rgrace: thanks for the encouragement

http://i43.tinypic.com/rlfdbt.jpg

Blue is 4H box, Orange is box-within-a-box. I have a fib drawn for reference, as well as a pivot level sandwiching the top, and purple boxes for entries upon breakout. current price action is indicating a weakly bearish box. If price pierces now, the lower purple box has to be moved to a lower entry point. If this formation holds until London we will have a setup.


EDIT:: UPDATE FOR THE ENTIRE NIGHT OF 11/21/11 (London +NY)

http://i39.tinypic.com/20kcg1s.jpg
AUD/USD- a play on the wedge break. This is combined with my GU and USD/CAD correlation play (see pictures below).

http://i41.tinypic.com/v3f5lv.jpg

See I entered at the break, and took half profits near the end (+32 pips took profit, the lowest it got was +38). If it wasnt for that this trade would be in the red due to sleeping.

http://i42.tinypic.com/25jujcn.jpg

I fell asleep before noticing that false break. But hey, I was planning to exit in that time because I was getting sleepy anyways.. so this is the part of my night thats mixed news- did I mess up, or did I not? And I'm not referring to falling asleep.

So if you were keeping up with my log, you will notice that I now only trade breakouts. Well, from before london to NY, my breakout finally happened with the 5:30am USA news (which I predicted to be the catalyst of the breakout, due to mixed sentiment throughout london keeping all pairs in lockdown). So the plus-side: I traded breakouts. I stuck with it, I did not enter early, I did not try to hope for trading to happen.

The bad-side, by the time the move happened I was super sleepy.. and FELL ASLEEP RIGHT BEFORE I TOOK PROFIT! I lost 4/5 of my profit! My 6-8% night became a measly 2%, because I fell asleep! BAHH!! Im 10/10 on breakout trading so far, no losses yet. Will upload pictures of previous night, as well as pictures for tonights setup in a bit.

nice stuff

why change a good thing i agree
look forward ot more post form ya

Looks like due to my sleeping mishap, I was caught completely offguard and missed the current breakout. The key pair to watch was EUR/USD, as it was the first to break out of consolidation (pulling all the other breakout ready pairs in terms of correlation).

Since I missed the initial move, and couldnt judge how strong this movement is, I have decided against hopping on, since asian sessions the worst session for me.

Yep, Done trading for the day. Found my breakouts, traded them. Took a looonnng time to update my spreadsheets cus of all my partial positions and whatnot, but now I have added a partial positions calculator to my traders spreadsheet(which took me 12 hours to make over the weekend on OpenOffice).

Give me a sec.. so I can upload my pictures and break down my night. Since I'm done trading for the week (going on vacation), Ill post my weekly stats here too.

http://i42.tinypic.com/2s0zp1d.jpg

If you recall, I fell asleep during the false breakout. The activity afterwards the following day reinstated and extended the box, so I would trade a southern break there. The initial movement wasnt that big, but a secondary small box formed. Horizontal line was best entry (happened with mediocre volume during asian session-not a true breakout). I entered in the circled area, and took profit right at the tip when I saw bullish retracement creeping up)

http://i43.tinypic.com/98bwit.png
The beauty of this trade was this was an entry order. From the original box in the upper left, I placed this entry order well out of the way of a spike, in an area where Im not surrounded by support. The formation of the seconary box (not a true box, just shows a weak consolidating pending strong breakout south), I was pleasantly surprised by this fill, and judging from the strength of the move removed my 20pip tp and let it ride to 31.8 right at the bottom before I tp for my full amount. Trading nothing but THE style of breakout that I conjured up for myself does feel rewarding, although there is a lot of deadtime waiting. I expected the breakout to happen between 11:30-1:30, due to the fact that I expected the catalyst for tonights sentiment will come from euro reports and the GPB bank minutes- and it did!

http://i39.tinypic.com/2zz3gid.jpg

Yeah so.. MY GOD USD/CAD moved so slow! While every other pair was moving, this was was stuck in deadlock. I couldn't trade aud/usd short breakout because my margin was tied up i this b*tch of a pair. Immediately exited when it "started to break out", but by then the breakout was full in effect, and too late to ride whatevers left of the wave. At least this wasn't a loser.

http://i40.tinypic.com/242is6x.jpg

This pair had the same problem as USD/CAD- tying up my margin, barely any movement. While other pairs moved 20-30 pips, this guy moved about... 5. I got fed up and took BE. As you can see, that line represents me entering a false breakout, and leaving RIGHT before the actual breakout. Not too familiar with nzd/usd as I don't trade it, but is this common? Lag/ lack of movement?
Due to unfamiliar-ness with this pair, I had a reduced risk (1/3 of my usual) trade on this guy, and when the pair pinched and "broke up" to form that new high pin, I was not worried, as there was no real fundamental information to show that was a direction change, when the market was clearly strong in risk-off mode. I suppose I could have entered in more positions at that top, but that would mean I would have sacrificed my cable or fiber trade- definitely not worth it.


As I said, I'm going on vacation, so here are my stats for the week (from sun-wed)
total gains: +16%
total trades: 15
winrate: 80%

to break down my trade types...

12/12 wins were breakout

0/3 were short-term anti-trend bounces ( which cost me..-9%. Imagine that, if I did not do these dumb trades, I would be up +25% for the week! Definitely focusing on all breakouts for next week.. maybe some trend trades)

P.S. I would be happy to share my traders spreadsheet with you.. if you ask/help me improve the layout

TIP: I will every once in a while give out ideas on what goes in my mind when I trade breakouts. On drawing boxes- Boxes represent consolidation areas( where price decides to lock down and oscillate with no real direction). The best boxes are the ones where bulls and bears are equally strong, so when you draw your box, the price candles fill up the whole thing. Good boxes are full boxes, because they are less likely to have spikes!

So now that I'm awake I scrolled over the charts to see the strength of the breakout from last night. roughly ~100-150 pips all around. This follows my prediction of this weeks breakout play by divergence, and so these last two days should be fairly dull, possibly retracing. The breakout play was separated into two halfs, the initial half, the break, and the catalyst. Since I'm done trading for the week I'll pull up a java chart and show ya:

http://i42.tinypic.com/33tlag8.jpg

http://i42.tinypic.com/168x3kn.jpg

http://i44.tinypic.com/1zwp5vq.jpg

Yeah so.. I've been busy with vacation and other stuff, completely missed Sunday LO! My breakout trading would have snagged at least 60 of the 100 pip moves! Yesterday I was stalking the charts, being EXTREMELY PATIENT, and finally entered in a trade. Will show you pictures below- I call it the Breakout-box bounce. Since these don't happen very often, I don't have enough live data for it to determine long term strength, but as for now I am willing to risk the MOST on this specific type of trade, because of the HUGE risk-reward ratios. Kind of like doubling down on blackjack when you have 11 and the dealer shows a 6


I have found ever since the epiphany chat, I have seriously calmed down as a trader. (at least for now) No longer am I chasing trades, no longer am i wondering "what if this, what if that?" The best realization so far is: THERE ARE SO MANY SETUPS! Even if you miss a ton everyday, guess what, Theres still more!!! I missed 3 setups yesterday, one which would have netted me 60 pips, and for the first time in my trading career, I did not get pissed. I did not dwell on it. I just moved on. And let me tell you, this feels GREAT. I keep telling myself "do it for italy, do it for italy" to remind myself of my goals, and its keeping me in check. I have a strong support base of people who constantly checks up on me and so that allows me to deal with accountability also. Thats enough of my psychology rant for today. Let me post up my trade.. (which is still running)

So I didn't update with pictures earlier, because work got hectic and I just needed a timeout from posting these charts. Anyways, I got stopped out ALOT at BE, and also missed 2 breakout entries since I was working, so todays gains is not nearly as impressive as it could have been. I also let a super trade ride on too long and it got stopped out at BE, because I did not take partials, OR exit trade before NY ended. Here are the pictures and explainations:


http://i40.tinypic.com/k9aozt.jpg

The two boxes are both consolidation resistance zones. You can see that the second box forms because it would not break through the first one. The bottom of this box is VERY DEFINED, unlike the top which had formed lower fractals. Sentiment during this time was bearish, so a break of that blue line if successful leads the price to freefall (I'm going to use this term in regards to price reaction to liquidity vacuums). I gained extra pips when I exited my aud/usd trade to add in a extra partial position, due to a slight divergence between when bulls entered the market and when bears were having a party. Classic breakout box right here.


http://i43.tinypic.com/mlikip.jpg

http://i43.tinypic.com/244tawh.jpg

My aud/usd trade requires 2 pictures, because this should have been an epic trade, but it only turned out "okay". The far left of the 4H chart you see.. a very rare and decently formed box! (I love love loveee 4H boxes they are rare to come by)

You will notice from that zone, price drops AND RISES in a parabolic fashion to test that box-zone. Perfect time to short right at this spot (my drawdown was 6 pips). The price dropped all the way to +60, and stupid me didnt exit or take partial profits, and by the next day at work it stopped out at BE due to a switch in sentiment. From this point of stop out, You get a SECOND retest of the blue zone at 1.0085, but since I was nervous about the origin of the bullish move (I have no newsfeeds at work), I waited for more confirmation and had to take a crappier entry price (The funny thing is, I had entries BOTH at the original test, and the second test which would have had 0 drawdown. Trust my system more?) The original position is marked by the biggest circle: the little circle inside it was the exact location I should have exited but didnt (after NY crossover, around 7am, positive consumer confidence news, slight change in sentiment- I saw this, the thought crossed my mind, but I did not exit. Maybe I was too sleepy and braindead but whatever it is, I f*cked up here). The second circle on the top is the better price entry upon a retest (4H box test during asian session is a very primo trade). And lastly, the last circle is where my profitable trade was, and exited about 20 min before london session opened, due rising bull strength. I picked the perfect bottom on this one, due to watching the 5 and 15 min chart for signs of direction.

The only thing that I did not describe for this picture, is the 2 lines. Technically, this box is actually slanted (but you can't draw that on the platform). This formation is bearish from a technical standpoint, and it has correlative boxes shared with GPB/USD/ NZD/USD, and USD/CAD, allowing for the most ideal setups.

All in all, no losses tonight, about 4 stop-outs at BE, and 2 trades that got buffed up. My 4% risk for tonight netted me +13%.

So for all that trade, you will know about the 300 pip spike caused by banks teaming up together to try and stabilize the eurozone. I had a huge chunk of my account wiped out, so emotionally it is very damaging. Especially since this was not me trading, but me preparing to trade- by setting up entry orders to mark my zones. The spike happened so fast it instantly KO'd all my trades, so its essentially like I had a very very bad losing streak. On the bright side, my account isnt so damaged that its burned, so in my attempt to nurse it back to health I will continue to trade my breakout strategy with the assumption that my account size is $2000 (if you are wondering, I'm essentially pretending the damage was never done), so I will be basing my risk% off a $2000 account, until my account reaches it again.

In the most literal sense, yes this means my actual risk is a lot higher than before, so why does it seem like I'm overleveraging to chase my losses? I'm actually not. Here are the logics behind my thinking:

-My strategy, albeit new, shows very rewarding stats. Here is the breakdown of my 6 weeks of breakout boxes:

Week 1-4: risking 1%, averaging 10-15% a week
Week 5-6: risking 2-3%, averaging 15 % a week (a lot less trading due to holidays)

Of these six weeks, I had one loss, which was a fakeout in the beginning. My overall strategy gives me ~83% winrate, but breakout boxes alone is what.. 99%? Now that I've had the worse (market ate my account), there really is nothing left to fear. Glad this happened while my account is a baby, versus when its all grown up and big.

-my emotions have shown dramatic growth, in that I stopped chasing trades and doing a bunch of my bad habits. I am very patient now, and realizing that I have all the time in the world to trade multiple setups, I never feel rushed

- the most important factor in me sticking with my status quo, is the lack off losses, which justifies the increased leverage. I'm pretty stubborn, which would be the only bad part to all of this, since I refuse to accept the bank spike as what happened to me. Even now, I'm telling myself it was all just a dream.

Last thing to note: Since I am now fully determined to trade only my boxes, and nothing else, my stats will reflect that. I will also not include any trades that are anywhere from -5<BE<5 pips, as I would not consider these a win or a loss.

Mate awesome idea - I am my own worse enemy also!

Will def get involved and share my thoughts and plans/protocols also as I really do sway sometimes and lost lots because of it..

and yet you look back and think, will I ever learn!!

I got royally and truly bull raped yesterday also.. my bad, leveraged too much as had some good positions and then had to see patients all day - came back and boom all gone - big learning curve!



may I please ask mate - theory and how you set up your boxes?

thanks

I suppose the only way we can learn from yesterday, is figuring out what telltale signs there was in the marketplace that hinted that this big move was coming....

agreed - thing is news like that is hard to come by unless brokerage or firm I presume...

So, after staying awake the entire night and noticing that
1) no catalyst to drive a breakout reaction
2) mixed news good and bad, each time causing price to spike ~10-30 pips each direction
3) The "noise" (random movements) got worse when NY session opened

I pretty much stayed awake alot longer than usual (not including the work time, I was at the computer 100% focus from 10:30pm-7am), and essentially wasted my time.

Therefore I am adding this new rule to my list, effective immediately. Please call me out on it if you see I'm not keeping up with it.

13. If I land a real breakout, at the end of the trading day I will ask (and post here) "Was that a real breakout?" If it was, then I will not trade the following day, but will still draw/setup my charts like usual. Instead, I will demo a new account trading S/R lines for the no trading day.


That said, there was a breakout setup, which I didn't trade. I will show you why below.

http://i40.tinypic.com/3505h1e.jpg



http://i39.tinypic.com/6t1imc.jpg

http://i44.tinypic.com/9kqwyq.jpg

I'm just using the 1H chart for simplication purposes. The breakout box setup was on GPB/USD, highlighted in blue at the highest points on the chart. You can see that strong red candle breaking out of the box..... BUT you are also breaking out into resistance. That long orange box shows lumps of orders from before in a previous box, as well as the lower blue box. Now if price breaks out upward, then it would have been a better trade. Anywho, since I was staring hard at the newsfeeds, I could not spot any catalytic news, so I decided to wait. And look what happened, it tests the previous box (breakout bounce trade), and richochets straight up back into consolidation zones.

Thats why I did not trade this one- the facts did not line up. Also I posted up the AUD/USD and EUR/USD charts for comparison, because they both had a bullish setup, so I was waiting for a breakout upwards, instead of a down. I guess in hindsight I would have figured out this was a false breakout and fade a trade back into it. But thats for another time.

So things havn't been the same for me ever since the swap spike, so I guess the shock of having the market punch me in the face is finally sinking in. I am now making nooby mistakes again- making very very accurate predictions, but not following through on them. My lil brother who is now starting to get interested in trading because of my strategy, is noticing how I've been able to pinpoint the tops and bottoms, each with 60-100 pip moves, and I have not made a cent off of any of them. Good grief something is wrong with me.

I will continue trading my breakout box strategy, as well as my box-bounces, but for the remainder of this week (and probably next) I won't be updating. Minds really at a blah mood.

So I ended up taking a break for the remainder of December, and took the time off to decongest. This week I hopped back into it with a fresh mind and had a green week. No mistakes, all winning trades. So this journal will start with the pictures etc again, and the goal for January is all green weeks. Feb starting, will start counting gains in percent.